The Role of Country Size and Returns to Scale in Empirical Assessments of Economic Integration: The Case of Spain

Oscar Bajo-Rubio () and Antonio Gómez-Plana

No 5, Documentos de Trabajo - Lan Gaiak Departamento de Economía - Universidad Pública de Navarra from Departamento de Economía - Universidad Pública de Navarra

Abstract: Empirical assessments of trade policy in single-country models have addressed extensively the assumption of increasing returns to scale versus constant returns to scale, but the alternative assumption of small open economy versus large open economy has not received much attention. This paper provides an evaluation of the relevance of both assumptions (i. e., returns to scale and country size) when analyzing a process of economic integration for a medium-size economy. We conclude that the often neglected country-size assumption might be more relevant for the empirical results than returns to scale.

Keywords: Applied general equilibrium; country size; returns to scale; trade policy (search for similar items in EconPapers)
JEL-codes: D58 F15 F17 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2000
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Citations: View citations in EconPapers (4)

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